The Basic Strategies for Golf Courses Using Revenue Management
The golf revenue management bag has four tools you can use regardless of how busy or slow your golf course is.
Revenue management in golf is about selling the right product to the right customer at the right time, for the right price, through the right channel and these four tools are used to deliver on those five “rights”.
CREATION - Wide variety of sellable on-course plus indoor golf experiences.
MARKETING - Effective communication of your experiences and product menu.
PRICING - Strategic pricing that include demand based dynamic changes oriented to your forecast.
SALES - Suggestive selling designed to deliver strong margins and recurring revenue.
*as always, in this blog when we mention ideas and strategies, we guarantee we can deliver you the technology that enables the execution.
Golf Revenue Management - CREATION
Let’s begin with product and a reminder about one of our core beliefs at smb GOLF. You’re not selling tee times, you’re selling experiences that often include a tee time. Many believe there are two experiences to sell. An 18-hole round and a 9-hole round. We disagree. At Raymond Memorial Golf Course in Columbus Ohio holes 10-13 include two par fours, one par five and one par three. Hole 13 finishes a short walk from the putting green and clubhouse. This is a sellable on-course golf experience. We will use this example in our explanation of revenue management marketing, pricing and sales. While this is a pure on-course experience there are many more options like the Salty Clean-Up, Exclusive Players Pack and more that combine goods and/or services with the experience. Salty Clean-Up: free salty snacks while we clean your shoes and golf clubs. Pre-paid at time of reservation, priced near $10. Click here for more ideas.
Golf Revenue Management - MARKETING
Once you have identified or created at least five experiences you should consider how and where you’ll tell your customers about what you’re selling. We could exchange the word communication for marketing but since there may be paid advertising here, we’ll stick with marketing. This tool includes creating a page that resembles a restaurant menu as well as descriptive text to be used in booking engines, apps, listings and more. Where is a key here. Think about where your golfers are. Are they online reading Facebook? Are they sitting in your golf cart? Are they standing on your tee box near a nice bench you have yet to install? Just as important as where is how. The text you use needs to be great. Professional descriptions that leverage nostalgia, history, geography, brand, sensory - use your best Don Draper creativity and don’t forget placement. The way you organize this ‘menu’ is important and you can look to Google and Amazon and analyze how they organize their messaging - or hire smb GOLF ;-)
The golf rates menu
Using a menu style approach for your golf rates allows you to create new customer engagement while broadcasting the different experiences and services you offer. By adopting this approach, you can effectively showcase the versatility of your offerings and implement dynamic pricing, which we highly recommend to our clients. Implement this strategy in various locations throughout your business. Enhance the pricing displays in your golf shop, ensuring that they accurately reflect the range of options available. Additionally, update your website's "rates" page to provide potential customers with detailed information. Utilize this pricing approach in your online display ads as well, capturing the attention of golf enthusiasts browsing the internet. Don't overlook the effectiveness of direct mail campaigns; despite living in a digital age, they can still yield positive results. To further maximize visibility, include a version of your menu-style rates in your golf carts. Lastly, consider incorporating signage on your practice range, showcasing your varied pricing options and enticing golfers to explore the unique experiences you offer.
At Raymond Memorial we would name the four hole experience “Raymond’s Valley” and describe it like this:
Raymond's Valley at Raymond Memorial Golf Course
Dive into a captivating golfing experience at Raymond's Valley, a meticulously designed segment of Raymond Memorial Golf Course. This unique four-hole journey boasts a balanced blend of challenges and charms, featuring two par fours, a par three, and a reachable par five.
From the first tee-off to the final putt, players will find themselves seamlessly weaving through the course, with four crossings of Kelly's Creek. The creek, with its reflective waters and gentle murmurs, not only serves as a picturesque backdrop but also adds a strategic challenge, urging golfers to plan their shots with precision.
Designed for the modern golfer and a nod to Robert Trent Jones, Sr., Raymond's Valley promises an engaging yet efficient round. Whether you're squeezing in a game during a lunch break or looking for a swift practice session, this experience is tailored to wrap up in less than an hour. Yet, the shortened play doesn't compromise the course's allure or challenge. Each hole, with its unique layout and surroundings, promises to leave an indelible mark on your golfing memory.
So, come experience the essence of golf, distilled into four spectacular holes at Raymond's Valley, where tradition meets time efficiency amidst nature's bounty.
We would add signage throughout the journey with details about pricing and how to make your reservation. We would duplicate this in the golf carts, on the website and in the golf shop.
Golf Revenue Management - PRICING
When I built the first automated version of dynamic pricing at GolfNow there were lots of firsts. The frequency of rates changing, the hourly utilization component, the detail by daypart - all of them were wins but my biggest miss was forecasting. I did not have access to enough data, at the golf course level, to build intelligent forecasts. Typically, we could only access historical online utilization. Without forecasts and a full understanding of say the last three years performance at the hourly level, our efforts were more aspirational than they were rooted in data. Today we use technology to build smart forecasts and attach stretch goals to the forecast. We then attach dynamic pricing to the forecast oriented goals and the results have been excellent. Not all pricing needs to be dynamic.
Take Raymond’s Valley for example. We would sell this for $20 and offer a gift card equal to 20 minus the amount of strokes the golfer takes to complete the four holes. Shoot par (16) and receive a $4 gift card to be used for your next tee time experience at Raymond Memorial. We use pricing to create a bounce-back offer. For a small price we’ve purchased golfer loyalty and won a larger share of their golfing wallet.
Pricing in revenue management should always include fences. Fences are designed to keep players with a discount status from playing during the highest value dayparts. Fences are a full article for the future but rest assured detailed data analysis is required.
Golf Revenue Management - SALES
Suggestive selling or up-selling is a key tool in revenue management. Today’s golf reservation technology allows for digital up-sales that provide a low stress experience for the golfer. At the counter, with a line of anxious golfers, we often see staff and customers shy way from adding range balls, exclusive towels or lunch at the turn. Online, the customer is not rushed and they have time to process the offer and enjoy potential bundle savings. We always want our clients to deploy up-selling in the golf shop and we suggest incentives for staff to keep them sharp and engaged in up-selling.
Yards Golf technology supports revenue management.
The Yards Golf tee time reservation experience allows for add-on sales during the booking experience. The technology comes with a filter option that allows for tee times that meet certain qualifications likes like time and/or day of week to offer specific add-ons. Example: The user can set the add-ons to include a box lunch at the turn if the tee time is before 10:30am. The thinking here is a box lunch does not make sense to offer if the golfers reach #9 green at 4pm.
Sometimes suggestive selling is playing the long game. Consider an exchange between the Raymond Memorial golf shop staff and a golfer who’s just paid for their round. This won’t lead to an immediate upsell but in five hours (or three days later) you may find an extra $80 in the register.
Staff: “Thank you and have fun out there. And one more thing, if you have any questions about Raymond’s Valley, you’ll see some signage out there, but be sure to stop in when you’re done with your round and I’ll provide any details you’re looking for.”
Golfer: “OK. What’s it called?”
Staff: “It’s Raymond’s Valley. It’s our 4 hole experience. Perfect for early morning or lunch time or whatever fits your schedule. Have fun out there. Thanks again”
The focus here is on driving average ticket size (adding $20 per golfer for an add-on Raymond’s Valley) but incremental visits/revenue is also a benefit. Orders from digital restaurant menus have about a 10–30 percent higher average check than from traditional ordering methods. Smart add-on suggestions are an important part of creating products. Good add-on prompts are data driven and customize the suggestions to the customer’s previous purchase behavior. Technology-based prompts are also a lot more consistent than those provided by counter staff. Again, upselling and suggestive selling is something that can work for you regardless of your demand level, and if it’s tech-enabled, it works even better.
Conclusion
The four basic tools are practical and essential for any golf course that adopts revenue management, regardless of size or style. They form the core of a successful revenue management strategy. By focusing on improved product creation, regular marketing tests, strategic pricing, and adept upselling techniques, you can increase profitability and enhance the golfer experience. These tools are not theoretical; they are actionable strategies that can be implemented at your golf course.
If you would like to have a conversation about this article and the concepts mentioned here, please contact Mike Hendrix. Conversations are free and make us all smarter. mike@smbgolf.com